Posted
by
Hemos
on Monday March 19, 2007 @10:07AM
from the bring-out-yer-dead dept.

Radon360 writes "There are countless patents that are promising but sitting idle, stowed in the corporate file room. In fact, about 90 percent to 95 percent of all patents are idle. Countless patents sit unused when companies decide not to develop them into products. Now, not-for-profit groups and state governments are asking companies to donate dormant patents so they can be passed to local entrepreneurs who try to build businesses out of them. "

The whole goal of filing tons of patents you won't develop is to wait for someone else to do the work for you. If you donate the patent someone else will complete the work but you won't get to capitalize on their success. (as was I'm sure the original goal)

Uh, a submarine patent is one that is submitted knowing that it will not be accepted, then revised every year (or was it two?) and resubmitted, knowing that it still will not be accepted. When someone finally develops technology that a good version of the patent would address, the patent is revised into a form that will pass muster, then resubmitted. The patent's grant date corresponds not to the date of first filing, but to the date when the submission is approved. This is a huge problem with the system. B

I was under the impression it applied to patents that were submitted with no real intent of doing anything with the technology, but rather waiting for someone else to develop it and then attacking (RIM vs NTP for example).

The patent's grant date corresponds not to the date of first filing, but to the date when the submission is approved. This is a huge problem with the system. Besides shortening the duration of all patents, we should be dating the patents to the date of first submission.

While I don't know about the rest of the world, US patents are effective for 20 years from the earliest filing date.

That's a bit extreme.
The reason for the patent system is to encourage people to invent new things rather than just copying the ideas of others. The problem is that congress (and therefore the public in general), thinks that it's just a set and forget type system that doesn't need to be revised.
Maybe throwing out the whole thing would be the best solution. I would think that paying attention to it and correcting some of its problems would be more useful.

If the owner of a patent hasn't started to develop it or make it available for licensing within 2 years of a patent being awarded, it should be made available for mandatory licensing with set compensation to the owner.

The inventors of the US patent system didn't envision idle or submarine patents. Their intent was to encourage the creation of useful devices that would actually be made available to the public in exchange for the temporary monopoly on profiting from that invention. Having 95% of all patent

there's more to patents than just encouraging inventions.the patent system is intended to encourage invention and the publication of inventions (as opposed to keeping inventions 'trade secret'). without a patent system, inventors would still invent, but they would keep their inventions secret denying others the opportunity to build on the invention.

the publication part of the patent process was short circuited, however, by a court system that has declared that only lawyers (specifically patent lawyers) are

Step 3 - Corporate tax attorneys and tax deductions. Got useless patents contact your local lobbyist so that they can get their pet politicians to write then up as multi-million dollar tax deductible donations.

The whole goal of filing tons of patents you won't develop is to wait for someone else to do the work for you.

In truth, the stealth patent strategy is only used by a tiny minority of vultures. The vast magority of companies (eg. IBM,HP) use them to get into cross-licence agreements, or use them as ammunition to defend against lawsuits. In the industry, patents are almost never used to "protect" invenstions, but only to protect against lawsuits. So in that way, no patent goes unused.

Yeah, but it is *not* the basic idea of the patents system, which is to protect the entrepeneur willing to invest time and money on developing new things to improve our livings, in exchange of money.If a company did a research, filled the patent and is not able to continue, move on. World/society must succeed, not a specific company. Maybe some sort of money compensation should be given to the original "creator", but the development of new technologies can't stop just because one particular company is unabl

If companies would be interested in doing something with the patents they could have enter sharing agreements with anybody willing, so they would split the money between the owner of the patent and the entity that actually does the work of implementing the patent.

Not sure if I agree with you... *Maybe*, some sort of compensation is deserved. But just *maybe*. Think about it for one second...The company already spent this money on R&D and *decided* to fill up a patent AND not to continue with the project. So, the company is not expecting to earn money by developing and/or selling the product. By doing so, it is blocking other companie's innovation in this field/subject for some years. So, the fact of not receiving a single buck for the patent is a kind of penalty

Yes, this is actually like "one man's garbage is another man's treasure" kind of thing - it promotes "vultures' sitting", waiting for a useful patent to be thrown away... err, donated.

If it is a matter of price (apparently, it is) then "dormant patent" holders should have equivalent of "annual garage sale" for their patents. Perhaps even an "Unused Patents (International?) Fair" should be established to promote putting dusty ideas to good use.

"dormant patent" holders should have equivalent of "annual garage sale" for their patents.

Though a neat idea, the pragmatist/pessimist in me wonders what benefit there is to a corporation to participate in such a thing?

What is the benefit to the corporation to participating? The costs are:

resources needed to research its patent base and ensure that given patents are unused and irrelevant to the company (this would be both a legal and corporate-political issue; in a large corporation, the politics a

(sorry...must actually look at the preview to make the "preview" function useful...)

"dormant patent" holders should have equivalent of "annual garage sale" for their patents.

Though a neat idea, the pragmatist/pessimist in me wonders what benefit there is to a corporation to participate in such a thing?

What is the benefit to the corporation to participating? The costs are:

resources needed to research its patent base and ensure that given patents are unused and irrelevant to the company (this would be both a legal and corporate-political issue; in a large corporation, the politics alone could be a nightmare to navigate)

resources needed to package up and sell the patents (and at "garage sale" prices no less??)

potential risk that a competitor picks up the patent (why give away a competitive advantage, even one that is unused?)

Think about it: would the typical manager/executive sign off on the budget to offload properties that don't cost anything to keep laying around? Would they absorb the potential risk of giving up an offensive or defensive legal shield?

This seems like a perfect argument for making large patent portfolios cost a lot of money to keep. Perhaps a system where you get 1-2 years free then increasingly large fees after that to keep your patent. Of course, the problem would be to find value for the fees that would be affordable for small busninesses while still giving an incentive to large businesses to abandon/sell unused patents. The money could even be put into examining new patents more carefully. Of course thats how a working system woul

You're certainly right in suggesting that no company is going to do this out of the goodness of their cold black hearts, however these same corporations donate millions of dollars each year. If the donated patents could count as a charitable donation, it would be much more appealing. Start-ups get the legal protection a patent offers without spending a ton of money, large corporations get a tax write off without giving away actual capital.There would have to be some legislation that says the write-off val

However, the motivation to discuss this matter at all stems from apparent benefit for the economy and society at large if patents (practical ideas and clever solutions to problems) are given at least a certain mobility, if not freedom. Of course the companies use patents as absolute prohibitions, to keep others from doing not what they themselves do, or are intending to do, but to keep everybody from making changes that would cause business losses to patent holders. Well, it is certainly not what the orig

A company should not consider $7000 [uspto.gov] over the span of 11.5 years as being "dramatically" expensive. Again, I suspect the cost to them of chasing down all of the required information to confirm that the patent is indeed dead-weight (including eliminating the possibility of risk from the competition) would be substatially more.

Besides, the marketing department would also have to take a blow, lowering the "registered patents" count on all of their brochures and boxes...:-)

The only reason it's possible to do business in the United States at all is because 90% of patents are left lying in a drawer rather than being rigorously enforced.

Oh come on, could you have possibly made a more generalized statement? Since when do all American businesses rely on patents, or rely on a patent remaining in hibernation? This nonsense sounds like its coming straight from the mouth of someone who has their head buried in an industry held above (or beneath) the water by patents.

All industries are affected by patents, but being able to conduct business, for many firms, has absolutely nothing to do with patents. You can't patent the ability to sell a product, charge for labour, and so forth. The original poster conveys the idea that it would be impossible to make a buck if all patents were actively enforced, which is obviously not true.

It's curious how recently the writeoff was dumped. And dumped completely, rather than putting caps on the value of a writeoff or tinkering with the way a patent's value is calculated -- or working with the patent office to stop granting so many worthless patents. Clearly there's a public benefit in having companies release their unused patents; the knowledge is distributed and the free market can get to work immediately, rather than hanging arou

It already does happen. We have an organization in town that's a partnership between one of the local universities and a local economic development corporation. Already (they have been operating for a few years now) they have gotten patents donated and got them to startups which in some cases are starting to get to market. When a business gets big enough, they start to get ideas that they won't follow through on because it might only be a million dollar a year idea. It just isn't worth the investment in dev

Wouldn't it be a lot simpler to make patents only valid while the holder is actively exploiting them (ie using them to build the device in question - filing suits against anyone that looks like they might be using it shouldn't count) - allow a 3 year grace period between filing the patent and when they first start using it to cover developement to market window

Wouldn't it be a lot simpler to make patents only valid while the holder is actively exploiting them

Bingo!

Let's be clear about this, for the benefit of the libertarians: patents (and other forms of protected IP, i.e. trademarks and copyrights) are government interference in the market. They are a form of government-granted monopoly which interfere with the normal operations of a free-market economy. As a matter of principle as well as practicality, this should only happen when the benefits clearly and greatly outweigh the costs -- "to promote the progress of science and the useful arts," as the Constitution defines the purpose of IP law. Granting government protection to unused patents clearly does nothing toward this end.

Doh! The USPTO already has a mechanism for this - maintainence fees. If you don't pony up $$$$$$ every few years the patent automatically expires. Companies, being greedy bastards don't maintain patents that they have no interest in. Which is probnably why this entire article and discussion thereof is stupid.

Companies, being greedy bastards don't maintain patents that they have no interest in.

Maybe small companies where the CEO or CFO are signing off directly on such expenses. But in larger corporations where "legal" is nothing more than a faint blip on the accounting radar, these types of decisions have been lost in the process.

Who is going to go to all the trouble of tracking down which patents in the portfolio are actually not in use (and that would mean completely unused). In a large organization, tracking that down could be nearly impossible, especially when patents are coming from aquisitions, etc. The individual would have to have pretty good grasp of the technologies covered by the patent, the technologies used in all of the company's products (and those of its subsidiaries, etc...), have a good grasp of who in the organization "owns" the patent, the history behind its application, etc...

This would be a daunting and expensive task. It may simply be cheaper to pay the annual renewal fees rather than (a) do the legal and technical research to know that the patent is truly unused, and (b) understand the risk that someone else (e.g. a competitor) could not use the patent against the company giving up the patent.

The maintenance fees aren't really all that enormous, though. The first 11.5 years of maintenance total $3200. Also, the fact that 90-some percent of patents lay unused suggests to me that companies will, in fact, maintain patents that they have no interest in.

The actual numbers are 85% after 3 years, 59% after 7 years, and 40% after 11 years. So the assertion that it is automatic is a crock.

And there are two fee tiers, one for large organizations, and a lower one for small organizations. The actual renewal rates are about the same for both sized organizations for 3 and 7 years. Since small companies come and go much faster than large one, it doesn't mean a lot that large companies pay the fee at 11 years more often.

The patent was never perfect but the principal and general application was sound. It allowed for actual innovation, protected it temporarily, and offered some transparency in the business world to value novel ideas.The problem with the libertarian black-or-white view of marketplaces is that humans _always_ screw it up. Not sometimes, always. I imagine the number of people that screwed this one up is relatively small, but isn't it always the few who make misery for the rest.

If there is limited capital, there will be monopolies. Innovation is worthless unless the means to produce are attainable. Monopolies become that way by erecting barriers to entry, not by being luddites.

Not every market lends itself to erecting barriers to entry. Very few markets allow a single entity to naturally control all means to produce.Thinking that all markets get reduced to monopolies is a very simplistic view, if you ask me... Even such a thing as 'market' is not static, but something dynamic that changes over time (meaning the 'monopoly' will have to adapt, and they are inherently bad at that). Less so in 'diamonds' and 'sugar', but more so in markets with more dynamics of the products in it (in

The patent was never perfect but the principal and general application was sound.

Since the very fundamental basis of "patent protection" is enforced by stifling competition, how can you possibly claim that the "principle" is sound?

Patent proponents keep stating that "it's obvious that patents encourage innovation" like a mantra, but I've never heard of any kind of evidence that this is so - and I've seen mention of a few academic studies showing that patent systems tend to retard innovation.

That's the guy who came up with intermittent windshield wipers. The specifics of which, I have issue with, but the basic principal is sound.

I'm an inventor who comes up with a great idea. I patent it, then I shop it to companies who would likely use it to gain an advantage. The company can examine the novel idea in detail and the inventor is protected from wholesale theft and place a value on the idea. If the inventor and business agree on some te

There's no conclusive proof that I'm aware of, just assumptions. There is one simple question though.If I invent an amazing new vacuum cleaner tomorrow and decide to try to market it myself or via a small company, what stops Hoover from just copying the exact design? I can't keep it secret like source code since It'll be available in the shops. Hoover can just pop to the shop, buy one and start designing their own version.

Do I take the risk of allowing others to see my design if I know it can be ripped off.

Patents allow the government to prevent freeloading in the market. Millions of dollars of Research & Design money is spent for companies to create a unique product to sell. If another company can simply steal the design stamp a new label on it, and undercut prices due to the fact they didn't have to spend their money on R&D, then no company would benefit from research.

"patents (and other forms of protected IP, i.e. trademarks and copyrights) are government interference in the market. They are a form of government-granted monopoly which interfere with the normal operations of a free-market economy."

You would be correct if you were only talking about bad, invalid patents. Otherwise, you miss the point of patents. Patents are supposed to deal with inventions that, were it not for patents, would not exist. For example, without patents, Viagra would likely not exist. If pha

You would be correct if you were only talking about bad, invalid patents. Otherwise, you miss the point of patents.

GP said that patents and other IP are forms of government interference in economy. He is absolutely correct in that - any patent, good or bad, is government-granted monopoly, and as such, interference with free market mechanisms. Whether it is good or bad is another story; however, the core tenet of libertarianism is minimization of government interference. Therefore, libertarians should tend

Anything that makes a market less free is interfering with free market, by definition. Any kind of government-enforced monopoly makes a market less free, also by definition (to take patents as the example, they restrict someone else from producing a product they could in the absence of patents produce freely - thus, the market is less free). Patents are government-enforced monopoly, by definition as well. Therefore, they are interfering with free market. What you are trying to do is essentially sophistry -

Actually, most Libertarians think that a system of intellectual property *is* one of the legitimate functions of government.

A strictly libertarian approach to patents is that if you invent something, then you have the right to licence that to others, for eternity, and if someone steals your idea, then you can sue them. If someone else independently invents the same thing, then they also have the right to licence it to others, for eternity. The two of you would be in competition, or you could collude to keep

It may be that "no patents" more closely approximates the above ideal than our current system does. I would argue that "no software patents" certainly approximates the ideal more closely than our current system.

I agree. I would far rather see no patents than the system we have today. Doing away with patents would do more to encourage innovation than anything else I can think of. I DO think that there is some merit to having drug patents, although they would have to last for a more limited time. In fact I'm not really against patents, but I think they should have MUCH shorter terms. That is enough to let you get up to speed, at which point you will have to compete on some basis other than a government-granted monop

This is part of the patent system that is broken. There is no incentive to not squat on the patent and wait for someone else to do the work. Invalidating the unused patents and passing them to the public domain will increase (IMO) the ability of small and agile businesses to do something with the previously patented item. When it passes to public domain, it removes the ability of anyone to use it just for suing others.If the patent is not being used, it doesn't need patent protection! The grace period lengt

Unfortunately it's not that simple I'm afraid...The time between patent filing and product on market is not the only criteria you would need to check. There could be many reasons why a patent is still valid, and because of the tremendous amount of patents applied for and (maybe not yet) given the work involved would be too great to deal with. It's simply not feasible to apply such a check to all patents within a reasonable timeframe. You would never be able to do only a part because the patent holde

How about about a system where a patent could be released if it has been dormant for a certain number of years. However, in order to get a patent released, you (as a company who would like to make use of the technology it describes) would have to request it. It would then be the filer's responsibility to prove they are implementing the patent within a reasonable timeframe. If they cannot, then the patent would be released to the public domain.This would effectively mean that companies would only be required

Wouldn't it be a lot simpler to make patents only valid while the holder is actively exploiting them

EXACTLY. How terribly naive to think that those companies that own many "stale patents" would donate their "valuable IP". Those who are truly interested in innovation rather than exploitation will make the effort to get the invention to market (either themselves or through actively pursuing licensing agreements with those that have the capital to do so). Those companies that are NOT interested in bringing the patented idea to market and are not evil parasites are already donating such patents to others (IBM for example).

All that are left are evil, parasitic submarine-patent holding companies. Such companies exist solely to make money without making an effort by holding innovation hostage. Such companies will not donate their IP simply by asking them politely. As you have suggested and I've advocated for quite some time, this illegitimate business model has to be outlawed in some way, and the best way to do this is to introduce the obligation to provide not only the description of the invention itself but an execution/delivery plan as well that describes the intended plan to bring the patented invention to market. The patent holder would be held to that plan, up to a maximum-allowable period of time (whichever is shorter). If the patent holder fails to deliver the patent would be permanently invalidated and the idea would be public domain.

Though much more patent reform is required, this single change would be a big step forward. Amazon may have been evil to file their stupid "one-click-online-purchase" patent but at least they actually brought the idea to reality. Submarine patents run completely counter to the spirit and purpose of patent law, are potentially damaging to the economy and global competitiveness of a nation and must be eliminated.

Wouldn't it be a lot simpler to make patents only valid while the holder is actively exploiting them

What do you do about the poor genius inventor who figures out cold fusion in his garage but can't afford to take the idea to market? What if no one will buy his patent for anything close to what it's worth?

It sounds to me like your real problem is with patent trolls, and there are other ways of dealing with trolls that won't hurt smaller inventors.

Many companies use patents defensively (or counter offensively). The company will patent technology or process X, though they may decide that it is better done internally with process Y. Or they may simply make the strategic decision that the effort and resources expended in pursuing profit in the patent are better spent pursuing something else. Nevertheless, the patent still has value to them because it gives them more options.

1. It helps deter competitors from launching patent infringement lawsuits against them, because they have patents that can be used in a counter suit.2. It prevents competitors from utilizing the technology that they developed.3. It gives them business options that they would not otherwise have if they didn't have the rights to the patent.

I doubt that most patents that are classified as being "unused" or "sitting around" still aren't providing some kind of value to the company that pursued them in the first place. It tends to be the nature of business that companies will look for ways to leverage their assets maximally. Besides, if the patents were valuable, the company would already have pursued licensing the technology to another person/company who can develop it into something viable.

If the patent systems of the world weren't as flawed as they are then such a strategy would not be required. Furthermore, it is the exactly the opposite intention of the whole process--patents are supposed to be granted to foster innovation, not prevent innovation by others.

Or they may simply make the strategic decision that the effort and resources expended in pursuing profit in the patent are better spent pursuing something else.

Companies are going to give up patents, without wanting something in return? The reason they took out the patent in the first place is $$$.I understand the underlying idea, if a company owns a patent which it can't use because it wouldn't be profitable, a non-profit organisation would be able to use the patent and create something useful out of it.

But let's face it, a company won't give up a patent just because it isn't profitable today... Who knows what happen tomorrow, making their patent

Why not have some sort of mechanism for releasing unused patents completely into the public domain after they idle for a certain amount of years? Wouldn't some sort of "use it or lose it" clause be in the best interests of everyone who isn't a lazy patent-trolling bastard?

"We donated the patent based under the assumption that it was worthless. Now that it isn't, we would like to have it back please." *waves DMCA around out of ignorance*
Thats exactly what charities needs to go with all of the useless junk in their second-hand stores. Second-hand patents!

*hilariously, goes and plays a pinball machine called 'Devil's Advocate'*

Ah, those Simpsons. Anyway, problem:

Those patents gathering dust are DEFENSIVE patents. That's why they're gathering dust; they're the deterrent your company has just in case anyone starts violating the patent sharing agreements that prevail between the big players in many markets.

If you donate them to other institutions, they 1) are no longer a deterrent and 2) may no longer be covered by patent sharing agreements. Congratulations! You have plunged the world into an era of 0 technological progress, as companies find the existing patent detente is no longer enforceable.

It would be better to simply grant every company ever a patent on everything possi -- oh, wait, that is the USPTO's actual strategy.

Patents are only rights to exclude others from doing something (namely what is claimed by the patent). "Donating" a patent to someone is therefore very unlikely to help someone build a business around it, unless that business is threatening to sue the hell out of everyone else who has ignored that patent until now (because the owner clearly decided not to enforce it). The reason is that it almost never happens that a product is only covered by a single (or even a couple of) patents, except sometimes with pharmaceuticals or so (but those patents are very unlikely to be dormant).

I've often wondered whether patents could be subject to a type of perpetual public auction in which anyone can make a binding bid on a patent. The price on the patent would be part of a delayed mark-to-market capital gains tax accounting system that would encourage companies to either monetize or sell patents because they would be paying taxes on those patents. Some small entrepreneurs might be "forced" to sell their patents (i.e., they owe the IRS $2,000,000 because they got a bid for $10,000,000), but then they'd get far more money from the high bidder than they could have if they kept the patent. High bidders would, in turn, have serious skin in the game and want to make money from the patent. Patent-horders would need to pay the gains taxes on their patent portfolios as if those patents where being economically used. I suspect the scheme would make it more costly to keep frivolous patents or to sit on a patent to prevent competitive innovation.

I've often wondered whether patents could be subject to a type of perpetual public auction in which anyone can make a binding bid on a patent.

I've often wondered whether property could be subject to a type of perpetual public auction in which anyone can make a binding bid on anything. (No, I haven't, but it makes for an entertaining introduction)

You have a nice house. I can force you to sell it. You have a nice collectible car. I can force you to sell it. You have an original Monet. I can force you to

The price on the patent would be part of a delayed mark-to-market capital gains tax accounting system that would encourage companies to either monetize or sell patents because they would be paying taxes on those patents.

Sounds to me like you're going to be forcing patent trolling...

If someone has a patent on X, and 4 companies need to use X, a law firm buys the patent for 4X as much as any of the individual firms can afford, and proceeds to either raise the price of patent licenses, or otherwise sues the 4

The USPTO charges maintenance fees on patents. If you do not pony up $$$$ every few years the patent expires. Companies not being in the business of expending cash needlessly do not pay the fees on patents they own but have no interest in develeping. Ultimately this means there will be very few active but available patents to donate to such organizations. In fact the whole premise of the article is nonsense.

If companies don't pay maintenance fees on a patent it will become abandoned, and thus (after a grace period) public domain.Patents that are expired, (17-20 years) are of course already thus.

Try searching on http://www.patentmonkey.com/ [patentmonkey.com] and the results will show you status. Roumour has it that just 10 minutes ago they fixed it so you can even be able to SEARCH on status.. like.. show me all the patents with 'cel phone' in the title that are abandoned.

While you are there, you can browse patents by front page - as if you were in the patent office in VA too.

As has already been pointed out [slashdot.org], companies who don't want their patents can just fail to pay maintenance fees. These are normally due [uspto.gov] at 3.5, 7.5, and 11.5 years from the date of issue. Also, companies will never do this if there's money to be made. It costs nothing to sit on a patent that might eventually turn into license revenue, but you give up that potential revenue by making a donation. The only conceivable reason a company might do this would be as a tax write-off, which saves them money. Of cou

It may prove difficult in the short term to reduce the term of copyrights which have already been extended. Also, the forces pushing perpetual copyright are strong. However, there is another route, which may be easier, employing the concepts of Aikido -- moving with the strong force and redirecting it in a better way. Rather than fight to reduce the maximum term of copyrights, consider that existing and fut

That seems like a bad idea to me, for a very simple reason.Think about it: companies are, first and foremost, interested in making money. Some may have ethical goals or values, too (let's call these "the good guys"), while others don't and care ONLY about money (the "bad guys"). Now, what kind of company would donate a patent they held?

Obviously, the bad guys wouldn't do it; after all, a patent, even if you're not using it right now and have no current plans to do so in the future, might still be valuable a